Gold becomes 2nd most valuable Aussie export to China

According to Australian Bureau of Statistics, the yellow metal became the second most valuable physical export to China, surpassing coal and only behind iron ore.

CANBERRA(BullionStreet): Australia's gold sales to China hit $4.1 billion in the first eight months of this year as it surged by a whopping 900 percent.

According to Australian Bureau of Statistics, the yellow metal became the second most valuable physical export to China, surpassing coal and only behind iron ore.

The unprecedented jump in gold sales, along with continued acceleration of export revenues for other commodities led by coal, up 80 per cent to $4bn, caused total exports to China to rise by 10.7 per cent for the year to August, the Bureau said.

Perth Mint supplied most of the gold to China through a variety of banks.

Shipments of Australia's biggest export, iron ore, were up 20 per cent for the same period but the total value of $26.9bn was down 5 per cent compared to last year, because of the mid-year price slump.

Analysts said Chinese buyers are hoarding the precious metal amid a slowing economy, property-buying restrictions and uncertain financial markets as its central bank increases its holdings.

China's foreign currency reserves of gold are low and its move to build them up will provide an important base demand for gold, they added.

China, the world's largest gold producer, has already increased its interest in Australian goldminers this year and taken a majority stake in listed-company Focus Minerals.

China's gold demand was beginning to outstrip even India's, they said. The trade in gold bars and coins for savings and investment has only ramped up in the past three or four years in China.